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decisions.pdf
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"Growing Your Business" - A Management Simulation
Executive SummaryQuarter Variance to Plan GraphicsQuarter Variance to Plan and SRO
OM LeversCurrent Decisions
Quarterly Decisions
Market Forecast for Q1'21 (OUTDATED)
* Market forecast now includes impact of Project #3 being introduced to the marketplace this past quarter. To get an estimate of the base market (for those w/o project 3 divide by 1.5)
Financial Metrics – Plan and Actual *
Plan Actual
Sales $3,291,550.00 $2,965,335.00
Net Income $343,772.96 $142,315.18
Cash Flow ** $283,141.26 ($257,749.44)
* Plan is annual commitment, SRO is Short Range Outlook and represents Decisions for Qtrs. To be played (the SRO may have changed from original plan for the Qtr.).
** Operating
Pre-Tax Income: Year Plan vs. Actual
Norma Smith
0
2,250
4,500
6,750
9,000
Q 3'
20
Q 4'
20
Q 1'
21
Q 2'
21
Q 3'
21
Q 4'
21
2,091 2,485
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Q4'21 - Expected Pre-tax NI Walk
Q4'21 - Expected Cash Flow Walk
$0
$1.4M
$2.8M
$4.2M
$5.6M
Ye ar
P la
n G ro
w th
M ar
ke t Sh
ar e
Pr ic e
VC ( I)
VC ( P)
Ba se
C os
t In
te re
st Ac
tu al
$687.5K
$4.2M
$-4.4M
$0 $0 $176.8K
$-391.9K$-23.4K$284.6K
$-5K$0
$65.5K
$136K
$206.6K
$277.1K
Q 3'
21 A
ct ua
l G ro
w th
M ar
ke t Sh
ar e
Pr ic e
VC ( I)
VC ( P)
Ba se
C os
t In
te re
st Q 4'
21 A
ct ua
l
$93.3K
$147.6K
$-87.9K
$7.9K
$-270
$-154.6K $-5.9K$-4.5K$-4.4K
$-724.2K
$-543.2K
$-362.1K
$-181.1K
$0
Be g
Q tr
C as
h/ D eb
t N et
I nc
om e
D ep
re ci at
io n
Re ce
iv ab
le s
In ve
nt or
y AP P& E
Co m
m on
S to
ck
En d
Q tr
C as
h/ D eb
t
$-406K$-2.2K
$0
$55.5K
$-277.1K
$0 $0 $0
$-629.8K
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Q4'21 - Expected OM Levers *
* All Ceteris Paribus * Variable/Base Cost Improvements Imply Cost Reduction ** % Volume Increase Required To Maintain CM $ Facing a 1% Price Reduction *** % Improvement (Decrease) Required To Maintain CM $ Facing a 1% Price Reduction
Decision Q4'20A Q1'21A Q2'21A Q3'21A Q4'21A
Sales
Total Market Demand [Units] 2,485 3,234 4,159 8,407 11,730
Lost Sales [Units] 0 0 0 0 0
Units Sold [Units] 829 1,050 1,193 1,364 1,582
Price [$] $550.00 $550.00 $575.00 $575.00 $580.00
Terms [Days] 60 45 40 40 30
Average Collection Period [Days] 64.4 47.3 42.2 43.7 31.9
Production
Raw Material On Order [Units] 1,050 950 1,825 3,550 3,875
Units Produced [Units] 1,166 950 1,298 1,650 1,650
Labor Force Hires [People] 5 10 10 15 40
Labor Force Layoffs [People] 0 0 0 0 0
Lines On Order [Units] 0 0 0 0 5
Planned Time 1.28 0.91 0.91 0.90 0.90
Effectiveness 85.4% 85.3% 88.8% 91.6% 81.8%
Discretionary Costs
Quality Engineering Expense $42,000.00 $14,000.00 $20,000.00 $23,000.00 $0.00
Research Funding Expense $0.00 $0.00 $0.00 $0.00 $0.00
Project 01 Funding $0.00 $0.00 $0.00 $25,000.00 $0.00
Project 02 Funding $45,000.00 $0.00 $0.00 $0.00 $0.00
Project 03 Funding $0.00 $0.00 $0.00 $0.00 $0.00
Inventory Rework Cost $0.00 $0.00 $0.00 $0.00 $0.00
0% 18% 36% 54% 72% 90%
Price
Volume
Variable Cost
Base Cost
Volume **
Variable Cost ***
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Decision Q4'20A Q1'21A Q2'21A Q3'21A Q4'21A
Marketing Expense $41,000.00 $0.00 $0.00 $0.00 $0.00
Advertising Expense $31,000.00 $15,000.00 $18,000.00 $20,000.00 $0.00
Lean Six Sigma Expense $25,000.00 $0.00 $0.00 $0.00 $0.00
Building Lease and Utilities $79,953.00 $81,806.00 $94,760.75 $108,606.23 $110,364.42
Reports
Marketing Report
Business Intelligence Dashboard
Q4'21: Production Problem: - Requested: 4,100 units - Raw Material : available for only 3,725 units - Line Capacity : available for only 1,650 units
Cash Problem: exceeded credit line $204,756.60 - Credit Line : $425,000.00 - Current Debt: $629,756.60
Q3'21: Production Problem: - Requested: 3,800 units - Raw Material : available for only 1,825 units - Line Capacity : available for only 1,650 units
Q2'21: Production Problem: - Requested: 1,900 units - Raw Material : available for only 1,298 units - Line Capacity : available for only 1,650 units
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